Governor Mills Signs Supplementary Budget Offering Significant Financial Relief to Maineans Amid High Costs
“Today I’m here to tell the people of Maine: Help is on the way. You are our greatest asset – and this budget is right for you.
A day after winning overwhelming support from the Legislative Assembly, Governor Janet Mills signed into law the Supplementary Estimates today.
The budget offers direct relief payments of $850 to Maine residents to help them deal with the high costs of inflation — one of the strongest relief proposals in the country. It offers tax relief to working families in Maine and two years of free community college for students affected by the pandemic, among other important initiatives.
In total, the returned budget is expected to bring $1,700 in relief to the average Maine household.
“We have shown once again that through hard work, Democrats, Republicans and Independents can come together to do what is right for the people of Maine – and that we can do it without the rancor or the bitter partisanship that has divided Augusta in the past”, said Governor Mills. “We may not be able to control inflation or global markets, but we can make sure the people of Maine have what they need to meet these rising costs – and that’s what we are doing. Today I am here to tell the people of Maine: Help is on the way. You are our greatest asset – and this budget is right for you.
With Governor Mills’ signature, the emergency legislation takes effect immediately. At the Governor’s direction, the Department of Administrative and Financial Services (DAFS) will issue payments as quickly as possible to approximately 858,000 people in Maine – with a target date of June 1, 2022 to begin delivery. Payments will be delivered by courier, which is the most reliable delivery method, to ensure money is delivered without material error.
“Through the partnership between this administration and the legislature, we have once again achieved a budget that balances Maine’s spending as required by law while providing much-needed relief to the people of Maine in a way that protects the both our citizens and the fiscal stability of the state against future economic downturns,” said Kirsten Figueroa, Commissioner of the Department of Administrative and Financial Services. “We will immediately begin sending checks for $850 to the mailbox of every adult in Maine who qualifies and, as always, we will continue to carefully monitor Maine’s economy, the well-being of Maine residents and the Maine’s financial health, investing in long-term solutions while preserving the state’s fiscal strength.
Highlights of the supplementary budget include:
- Inflation relief: Giving back more than half of the state’s surplus — $729.3 million — in the form of one-time $850 checks directly to about 858,000 Maine residents. Providing relief in this way gives Maineans the freedom to decide for themselves how best to use the money, whether it’s for groceries, gas, oil, electricity, or others. expenses. Recipients must file a Maine personal income tax return as a full-time resident by October 31, 2022 and not be claimed as a dependent on another person’s income tax return. Qualifying Maine individuals must have a Federal Adjusted Gross Income (FAGI) of less than: $100,000 if single or married and filing separately; $150,000 if filing as head of household; or $200,000 for couples filing jointly.
- Maine Retiree Tax Relief: Exempts Maine’s Supplementary Retirement Pension from income tax, improving deductions for residents from $10,000 to $25,000 for the 2022 tax year, to $30,000 for the year of tax year 2023 and $35,000 for tax years 2024 and beyond. This will provide $36.8 million in tax relief for Maine retirees in 2022, with an average tax reduction of $560 in the first year alone. Superannuation income from all sources will be tax-exempt in Maine up to $35,0000 per person by the 2025 tax year, providing an average annual tax reduction of about $795. Military pensions and annual Social Security income remain fully exempt in Maine.
- More property tax relief: Provides $7 million in Permanent General Fund dollars to provide stable housing by increasing the maximum benefit of the Maine Property Tax Equity Credit. An estimated 100,000 low-to-middle income homeowners and renters who pay more than 4% of their household budget in property taxes or rent will be eligible for a refundable tax credit of up to $1,000 each year, with a credit even more generous $1,500 in maximum relief extended to seniors.
- Increased tax relief for low- and middle-income families in Maine: Provides $27.6 million in General Fund dollars so families can afford the necessities and fight poverty by increasing the value of Maine’s Earned Income Tax Credit (EITC), which provides credit tax refund to workers and families in Maine. This increase is estimated to help 100,000 people in Maine, mostly working families with incomes below $57,414, by increasing the maximum benefit by an average of $400 per family, bringing the total EITC benefit per family at an average of $764 per year.
- Two years of free community college: Dedicating $20 million in one-time General Fund dollars to provide up to two years of free community college to all students in the graduating high school classes of 2020, 2021, 2022, and 2023 who enroll full-time in a Maine community college.
- Revise the student loan debt repayment program: Provides an annual refundable tax credit of $2,500 or up to $25,000 for life for student debt relief. The supplement revamps the Educational Opportunity Tax Credit and transforms it into a powerful, leading tool for paying off graduate student debt and helping employers attract people from all walks of life to work and live in the State of Maine.
- Prevent tuition hikes in the University of Maine system: Provides nearly $8 million in one-time General Fund dollars to help the University of Maine system keep tuition flat for in-state students and provides ongoing funding for the system to invest in updating and renovating buildings on its campus.
- Raises wages for child care workers and early childhood educators: Providing more than $12 million in General Fund dollars to increase the wages of child care workers and early childhood educators to strengthen our child care system in Maine, in line with the goals of legislation sponsored by House Speaker Ryan Fecteau, and in addition to the significant investments the Maine Jobs & Recovery Plan is making in expanding child care and pre-K education.
- Fully funds free school meals: Provides nearly $27 million in General Fund dollars, to be combined with $10 million previously set aside by the Governor and Legislature, to fully fund Universal Free Lunches in public schools, in line with a led initiative by Senate Speaker Troy Jackson.
- Developing children’s health insurance: Provides $3.2 million in General Fund dollars, which will leverage more than $9 million in federal funding, to expand the Children’s Health Insurance Program, otherwise known as CHIP, to provide comprehensive coverage to 40,000 additional Maine children.
- Raises MaineCare Rates: Provides $30 million in ongoing General Fund support to fully implement updated rates for direct support worker salaries, add and accelerate new cost-of-living adjustments for rates, and increase rates for sufficient to pay direct support professionals at 125 percent minimum wage. This is in addition to the more than $500 million investment already made under the currently enacted two-year budget for MaineCare and provider payments.
- Supports Maine hospitals and nursing homes: Sending $25 million in one-time funding to Maine hospitals, including $6.8 million from the general fund, as well as $25 million in one-time funding to long-term care facilities, including $7.5 million from the general fund, to help those Maine health care organizations deal with one-time costs related to the pandemic.
- Tackles PFAS: Dedicate an initial $60 million in General Fund dollars to capitalize a trust fund to address PFAS contamination, consistent with the intent of GL 2013 and with the goal of securing funding sources federal and other long-term supplemental funding, as well as approximately $9.3 million for PFAS mitigation and related efforts in Maine in 2022 and 2023, including in-state lab capacity, testing on wildlife and additional support for farmers.
The budget also maintains the Fiscal Stabilization Fund, otherwise known as the Rainy Days Fund, at $493 million, the highest ever. Under Governor Mills, Maine’s fiscal stabilization fund more than doubled.
Read a full page on the Supplementary Estimates (PDF).
The supplementary budget is balanced and takes a prudent and fiscally responsible approach, devoting more than 75% of the surplus to one-time initiatives rather than ongoing spending after the nonpartisan revenue forecasting commission. noted that long-term revenue projections are “volatile and sensitive to significant downside risk” in the coming years.
It limits net appropriations to just $172 million of the $1.2 billion surplus, devoting more than 75% of the surplus to one-time initiatives and savings as a hedge against economic uncertainty, rather than to current expenses. The proposal translates into a General Fund budget of $8.67 billion. The general fund budget currently adopted is $8.5 billion.
It builds on a previous budget measure — also passed nearly unanimously by the Legislative Assembly — which hits 55% of the cost of education, fully restores revenue sharing with municipalities, replenishes the Land for Maine’s Future and is providing a total of $371 million in relief to Maine residents and businesses, including disaster relief payments of $285 to more than half a million Maine residents.
It also complements the Governor’s Maine Jobs & Recovery Plan, his administration’s plan to use American Rescue Plan Act funding to improve the lives of Maine individuals and families, help businesses, create well-paying jobs and build an economy ready for future prosperity.